EU’s Barnier backs "strong" Europe in NYSE battle

BRUSSELS (Reuters) – One of the European Union’s most senior officials signaled his support for Deutsche Boerse’s (DB1Gn.DE: Quote, Profile, Research) takeover bid for NYSE Euronext (NYX.N: Quote, Profile, Research), saying Europe’s financial centers need to maintain their global status.

“I don’t want Europe to become an outsourcer,” EU Commissioner Michel Barnier told Reuters on Monday, when asked if he supported the German stock exchange’s bid for NYSE Euronext in the face of a rival offer from Nasdaq (NDAQ.O: Quote, Profile, Research) and IntercontinentalExchange (ICE.N: Quote, Profile, Research).

“We want Europe’s financial centers to be strong, with a global dimension and to play their role,” he said in an interview.

Barnier, who oversees European banking reform, also signaled that he was in favor of handing losses to bank bondholders in cases where banks get into financial difficulty.

“The question is whether a bondholder wants to participate in a resolution, if needed with an haircut, or whether he wants to lose everything,” said Barnier. “It’s better for bondholders to restructure than to lose everything.”

Barnier’s comments come as the ECB and EU countries continue to press Ireland to abandon the idea of handing a loss to bondholders in its banks, which had been a central plank of the Dublin’s plans as its debt climbed beyond 150 billion euros.

Germany pushed through a scheme which would make it possible to restructure a country’s debt after 2013 and Barnier has already outlined how a similar scheme for banks might work.

But the moves have worried lenders and some officials fear such a move could exacerbate financing difficulties for fragile banks and countries.

(Reporting by John O’Donnell and Julien Toyer, additional reporting by Carmel Crimmins in Dublin, editing by Rex Merrifield)

EU’s Barnier backs "strong" Europe in NYSE battle